2009-10 Adopted Budget - City of Hoquiam

Water, Sewer and Storm Fund: #401The following charts and graphs summarize forecasted revenues for the City’s water,sewer and storm departments. In 2009 total revenues are forecasted to increase 22.6%from 2008 levels, primarily due to the grant proceeds for dam removal. In 2010, totalrevenues are projected to decrease 13.4% over 2007 due the absence of this grant.As evidenced by the graph entitled “Utility Service Revenue History 2000 through 2010”,utility rates increased for water, sewer and storm operations in January of 2006. Theserates increased due to a rate study completed in 2005 and to fund necessary capitalimprovements of the water and sewer departments.Revenue projections anticipate a continuation of inflation based rate increasesapproved by the Council. These annual rate increases are necessary to addressoperating expenditures and desperately needed capital replacements.Staff are currently monitoring financial performance in these utility funds, primarilyStorm, to determine if the utilities are meeting their financial benchmarks.In 2009 Water Utility revenues are projected to decrease 2.1% from 2008 budgetedlevels, as the budgeted amounts in 2008 appear to have been too aggressive. 2009includes an increase that was approved by the City Council in 2005. This is also therate recommended from the original utility rate study completed by FCS Group in 2005.Sewer utility revenues are projected to increase 11.1% from year 2008. Primarily due toa planned rate increase and an increase in connections. The adjacent chartsummarizes changes in sewer utility revenueSewer service revenue is expected to grow slightly through 2010 as the Council passedan Ordinance setting rate increases until that time.Storm Drain revenues are projected to remain constant for the foreseeable future. AStorm Drain Department was broken out of Sewer and created in 2005. The currentStorm Drain Ordinance has an equivalent residential unit model where all propertiescontribute, regardless of the property type. The chart on the following page detailsstorm drain revenues by category.The vast majority of storm drain revenues come from monthly storm drain utility rates.However, the rate methodology will need to be modified to obtain the necessary$250,000 per year budgeted for the biennium.70